Maybe it’s nothing more than the inevitable outcome when the creativity of issuers runs up against the objectives of the regulators — all of which makes the capital-raising business more complicated.

In some cases that’s a good thing: operating in the public markets is a privilege and requires issuers to follow the rules and procedures that have been laid down. And those rules and procedures can help retail investors end up with a portfolio of decent companies and not a pile of the latest trends.

Consider the state of play in two hot investment sectors, marijuana and cryptocurrencies/blockchain.

The regulators have allowed a slew of marijuana-related issues to raise capital from all classes of investors, in a variety of forms: some have gone public directly while others have either got there through a reverse takeover or a transaction with a capital pool company.

The only major issue seems to be the different views taken by different stock exchanges on whether they will list the shares: if the issuer has an extensive operation in the U.S., then the smart thing is not to call either the TSX or the TSX-Venture. But the Canadian Securities Exchange will accept the phone call.

For cryptocurrencies, the regulators have adopted the position that such offerings are not ready for prime time, meaning that retail investors aren’t allowed to purchase them. But they are ready for those accredited investors who can purchase such offerings in the exempt market.

“The regulators are saying they don’t want to allow retail investors direct access because they have fundamental concerns about the asset class, about valuation, or custodianship,” noted one securities lawyer.

Of those three concerns, custodianship is important because under the rules, only a financial institution can be a custodian and no Canadian institution offers such a service for cryptocurrencies. (VersaBank recently announced that is launching a digital vault.)

As a result of those concerns, no cryptocurrency ETF has been approved for distribution in the public markets. Instead, capital raisings for cryptocurrencies get completed in the exempt market. But they are not a slam-dunk in that market as, contrary to the normal situation, the regulators have been involved.

Recently 3iQ Corp., which is in the process of raising capital from accredited investors to invest in multiple crypto assets, agreed to terms and conditions with the Ontario Securities Commission and the umbrella regulator (Canadian Securities Administrators) to act as a portfolio manager and investment fund manager. Normally the regulators don’t get involved in such matters.

3iQ’s Global Cryptoasset Fund will invest directly in bitcoin, ethereum and litecoin. Another manager, Calgary-based Ross Smith Asset Management, which launched an exempt market crypto fund last summer, stopped raising new capital last fall pending the introduction of new regulations governing custodianship and suitable exchanges. XAPO, which only deals in bitcoin, is the fund’s custodian; a set-up limits the ability of the fund to expand into other cryptocurrencies.

While cryptocurrency offerings have moved to the exempt market, some retail investors still aren’t shut out: they can open a digital wallet and trade away.

As well, investors have been attracted to the slew of public companies in the blockchain world. For example, Hive Blockchain Technologies (which emerged from Leeta Gold Corp. last year) has raised more than $150 million in the last few months. It claims that it “bridges blockchain and cryptocurrencies to traditional capital markets.”

Given those alternative investment opportunities, some have argued the solution is to bring everything into the public market, a move that would put the spotlight on the sector and the participants.